Utah sues Kalshi and Susquehanna affiliates over illegal gambling claims

Utah's attorney general filed suit against Kalshi and two Bala Cynwyd-based Susquehanna International Group affiliates, alleging that prediction market contracts constitute illegal gambling under state law.

The complaint names the Susquehanna firms alongside Kalshi, marking the first time a major institutional trading operation has been drawn into state-level enforcement against prediction markets. Susquehanna is among the largest liquidity providers in the sector.

Utah joins a widening list of states asserting that event contracts fall within their gambling statutes regardless of the CFTC's position that designated contract markets operate under federal jurisdiction. The preemption question is pending before the federal circuit courts, and no binding resolution exists.

The legal standard at issue is whether the Commodity Exchange Act's grant of exclusive jurisdiction to the CFTC over swap and futures contracts displaces state gambling prohibitions when those contracts are listed on a federally designated exchange. Until a federal court resolves that question definitively, state attorneys general retain room to file and states retain room to win.